Report seeks more opportunities in shared services

By Adam Mazmanian

Feb 27, 2014

The federal government is just scratching the surface when it comes to consolidating business functions such as IT, human resources and financial reporting, according to a new report from the Partnership for Public Service and Deloitte.

Although financial constraints and pressure from oversight bodies are driving the kind of cost cutting that shared services can achieve, the report suggests that there are other powerful benefits, including an increased focus on core agency missions and improved accountability and standardization of business practices.

"Cost starts the conversation, but if in the end it isn't about a customer-centric delivery of the services you need to deliver, then I think we're missing the bigger opportunity," said Ellen Herbst, the Commerce Department's chief financial officer, at a Feb. 27 Partnership for Public Service event linked to the report's release.

At NASA, human resources, IT, procurement and finance are run out of a single center that serves employees at the agency's 10 far-flung flight centers and research labs. According to the report, NASA employees are highly satisfied with the remotely delivered services, and NASA is contemplating expanding the program to outside agencies.

The Energy Department took shared services a step further by consolidating the core agency mission of cleaning up contaminated nuclear weapons research sites. The effort brought together support functions such as human resources and budgeting with the more rarefied occupations of nuclear safety and decommissioning. The goal, according to the report, was to "retain staff adept at the complex closure procedures who would serve multiple sites."

Another approach to shared services is aligning common mission functions across multiple agencies or components. The Department of Homeland Security is experimenting with a shared-services framework called the Integrated Investment Lifecycle Model to eliminate redundancies and overlapping functions in business and operational areas across the department's varied components. Last year, DHS began testing the approach in biodefense, cybersecurity, and border and transportation screening.

Among the institutional obstacles to shared services is the dispersal of authority: Centralizing and outsourcing business functions can mean taking jobs and money away from federal managers.

"Agencies that have been successful at shared services have been able to reduce cost overall from a contract spend perspective, but also have been able to focus people more on the mission," said Lou Heinzer, a principal at Deloitte who worked on the report. "It's more about taking those billets, repurposing them, and having them focus more on the mission and less on the administrative side."

Having experienced internal advocates is essential. "In almost every case we studied, the person heading the effort had extensive experience leading government agencies, departments and organizations at the federal, state or local level, enabling them to understand how to change bureaucracies," the report states.

Overall, the report found that the keys to success are good governance, agencywide support, and a willingness to listen to the employees and contractors who are going to be affected, along with finding ways to measure success and using performance metrics to ensure accountability.

About the Author

Adam Mazmanian is FCW's senior staff writer, and covers Congress, health IT and governmentwide IT policy. Connect with him on Twitter: @thisismaz.